President Trump's agenda: Delayed or derailed?

WASHINGTON, D.C., U.S. — As Congress returns from its August recess, the key question is: What will happen to President Donald Trump’s agenda? Little has been accomplished to date, and August brought new distractions, including more staff firings, criticisms of Republican allies in Congress, the Charlottesville, Virginia, U.S., controversy and the aftermath of Hurricane Harvey. Will President Trump’s proposals be slowed down, or have such events blocked them?

President-elect Trump had a number of key issues he wanted to pursue: appointing a conservative Supreme Court justice; moving an international economic program that rescinded or renegotiated trade and other agreements; controlling America’s borders through immigration reform, including building a wall along the border with Mexico; cutting back on growth in federal spending and regulation; repealing and replacing the Affordable Care Act (ACA); cutting income tax rates on corporations while providing tax relief and reform for individuals; and launching a massive infrastructure investment effort to boost the economy and U.S. competitiveness. Where does this agenda stand nine months into Trump’s presidency?

The record to date

International agreements received early and aggressive attention. He withdrew the United States from the Trans-Pacific Partnership (TPP); he pulled the country out of the Paris climate agreement; he initiated a renegotiation of the North American Free Trade Agreement (NAFTA) under tight deadlines; and while twice affirming Iranian compliance with the nuclear agreement he has indicated strong doubts about it.

From a purely agricultural perspective these steps do not necessarily equate to gains. U.S. agricultural exports to Pacific Rim countries could be disadvantaged if the other 11 countries in the TPP proceed to a final deal and implementation.

With respect to NAFTA, while there are some areas of market access (e.g., poultry and dairy) and some sanitary/phytosanitary regulations that could boost trade, agriculture’s main concern is that the renegotiation “do no harm” to a large, growing and prosperous market. The withdrawal from the Paris climate agreement has less direct implications for U.S. agriculture (similarly with a potential future reimposition of sanctions on Iran), but such actions would further exacerbate relations with allies and customers.

The Supreme Court nominee — Neil Gorsuch — did get confirmed, which brought another conservative voice to the Court. But this only was achieved by changing the rules for approving such nominees from a super majority to a simple one. The long-term effect could be to create a more partisan Supreme Court.

On health care, President Trump and Congress have failed to agree on any strategy. Simple repeal and “repeal and replace” have both failed. President Trump has blamed these failures on the Republican leadership in Congress, straining ties he will need to move his agenda forward. And there continues to be no clear direction on health care policy, with options ranging from maintaining federal subsidies that help to keep the ACA afloat to withdrawing such subsidies, experiencing higher insurance rates, lower participation rates and, possibly, the “death spiral” that some fear from the ACA. A decision here is needed soon, before the sign-up period for next year’s coverage (Nov. 1- Dec. 15) begins.

The struggles over the ACA have slowed movement on other legislative fronts. Treasury Secretary Steve Mnuchin’s August deadline has passed without a tax bill tabled. The need to raise the debt ceiling by the end of the federal government’s fiscal year has become entwined with a battle over funding the Mexican border wall. No substantive infrastructure measure has been introduced. And the Trump administration’s budget proposal was deemed “dead on arrival” in Congress because of draconian cuts to a variety of programs that enjoy broad support, even among Republicans.

Going forward

A variety of forces have come together to undermine further prospects for President Trump’s agenda. More and more “sanctuary cities” have expressed their willingness not to cooperate with immigration enforcement efforts. The racial tensions rekindled in the aftermath of Charlottesville and President Trump’s comments about the incident seem to have strengthened this resistance.

Hurricane Harvey’s devastation in Houston and in surrounding communities appears to have changed spending priorities, with funding for a wall along the southern border a likely victim. Promised infrastructure funding now must compete with funding for reconstruction efforts in the affected areas, beginning at $8 billion but likely to go much higher. This disaster also seems to have changed the tone in Washington, with deficit hawks being less willing to face a showdown and possible shutdown of the federal government over the need to raise the debt ceiling and pass a budget for the coming fiscal year.

A Trump agenda item likely to receive attention in the coming month is taxes. Here the road map to lower corporate tax rates may have become clearer, although they are unlikely to fall as far as President Trump’s 15% target. Paying for tax cuts seems totally confused, with the Trump administration rejecting a “border adjustment tax,” and most other options having generated serious, organized resistance. No consensus has emerged on proposals to reform or simplify the individual tax code.

Consequently, the remaining months of 2017 are unlikely to see significant gains against President Trump’s announced goals. Rather, the last quarter of the year is likely to test whether the political lessons of the last few months, together with the resolve to deal with the aftermath of Harvey, can be enough to get some business done. Included in that agenda are: securing a new debt ceiling without a government shutdown, a business tax cut, a moderating budget and no radical surprises on trade, immigration, Iran or North Korea. But, progress without confrontation requires compromise. Are all parties ready, or not?